The reason luxury travel is so expensive these days

As inflation and rising costs abate, luxury travel prices are holding firm.

That’s because at significantly higher rates, “the demand is there,” said Henry Harteveldt, president of the travel market research company, Atmosphere Research Group

For price-conscious travelers, competition will temper costs at the budget and mid-scale sectors, said Harteveldt.

“For those of us who live on planet Earth… budget airfares have been coming down because competition there is growing,” he said. “Budget and midscale hotels are among the fastest growing in the hotel sector. They too introduce lower pricing as they open or expand the number of properties in those categories.”

Booking early can save money on airfares, but hotel pricing works differently, he said.

“With hotels, you either book early or wait until within two weeks of your travel date,” said Harteveldt. “I personally book refundable and changeable hotel rates [because] I have noticed that, in some cases, hotel rates can go down… closer to the check-in date, if demand isn’t where they expected it to be.”

Overall, travel demand remains strong, yet surveys show some travelers are beginning to buckle under the costs.

But this isn’t affecting the luxury travel sphere at the same level, said Dave Goodger, managing director for Europe, the Middle East and Africa at Tourism Economics, an Oxford Economics company.

“The luxury boom continues despite the flatlining economic activity in some major developed markets,” he told CNBC Travel.

The industry continues to see upward pricing pressure for luxury experiences, he said.

“This has come as some travellers have traded up for more luxury experiences,” he said. “It also reflects the fact that income and wealth levels, including accumulated savings, remain healthy for higher net wealth households.”